Canadian Metals Exploration v Wiese is a June decision of the BC Court of Appeal regarding the obligations of fiduciaries to beneficiaries. Wiese was a shareholder and fiduciary of Canadian Metals Exploration (CME). CME was in the business of mineral exploration and had discovered a major claim that it did not have the resources to exploit. There was a running discussion between three directors and two managers of the company (of which Wiese was one) in which CME decided that it did not have the resources to stake the claim. Wiese then proceeded to stake the claim through a new company. CME underwent a change in management and then sued Wiese after her refused CME's demand that he transfer the claims.
At trial the Court concluded that Wiese had received the information in question solely as a result of his fiduciary relationship with CME. In upholding the decision that Wiese had acted improperly the Court of Appeal said:
The essence of the fiduciary relationship is the right of the beneficiary (in this case the company) to the impartial and bona fide exercise of decision-making powers by the fiduciary, free of any suggestion of personal interests. A fiduciary is therefore prohibited from using information he has obtained in the course of his or her duties, for personal benefit, even though the beneficiary is unable or unwiling to use the information...(para 19)
This 'bright line' "rule against conflicts of interest operates to obviate the necessity of the company's proving an improper motive."
The Court does note the possibility that there can be an exception to the strict prohibition on fiduciaries taking up an opportunity but is clear that if a fiduciary wishes to do this s/he must ensure that everyone at the meeting is aware of what is being discussed and that the decision in question is free of any consideration other than the best interests of the company.
This is a good news decision - a clear standard without qualifications.
